What collectivists refuse to recognize is that it is in the self-interest of every businessman to have a reputation for honest dealings and a quality product. Since the market value of a going business is measured by its money-making potential, reputation or "good will" is as much an asset as its physical plant and equipment. For many a drug company, the value of its reputation, as reflected in the salability of its brand name, is often its major asset. The loss of reputation through the sale of a shoddy or dangerous product would sharply reduce the market value of the drug company, though its physical resources would remain intact. The market value of a brokerage firm is even more closely tied to its good-will assets. Securities worth hundreds of millions of dollars are traded every day over the telephone. The slightest doubt as to the trustworthiness of a broker's word or commitment would put him out of business overnight.Alan Greenspan, The Assault on Integrity, 1963.
Thursday, July 16, 2009
Alan Greenspan on Market Regulation
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6 comments:
Unfortunately, a food manufacturing company and a brokerage are not the same. The brokerage world is a small world that is well connected. The food manufacturing company that poisons a customer to save money can still keep most of its customer base if that one or two customers do not have a voice or don't have a big enough voice.
Pffft you're going to buy food from a company that has been known to poison its food if you know government isn't there to protect you?
Fortunately individuals aren't that retarded.
That company would go down just like the Pop Shoppe.
If I don't know that the company has sold poisoned food due to the little guy not have the voice to make it a national issue, yeah, I would buy it.. Josh, there are many, many companies that have had issues that are still in business in other regions, but not in others...
AGAIN, brokerage firms are not the same as food manufacturers.
"If I don't know that the company has sold poisoned food due to the little guy not have the voice to make it a national issue"
You don't think in a free society this type of news wouldn't spread pretty quick? People are stupid. The would be independent groups looking for this type of news just to be able to spread it, as their are now.
It would force you and everyone else to be more responsible when choosing which food you eat and from where it is coming from.
This is bad?
"You don't think in a free society"
I don't use Orwellian phraseology. We are talking about the market, not individual rights.
"this type of news wouldn't spread pretty quick? People are stupid. The would be independent groups looking for this type of news just to be able to spread it, as their are now"
Depends on how well the media is involved.
"It would force you and everyone else to be more responsible when choosing which food you eat and from where it is coming from.
This is bad?"
Not bad, but not enough.
"Not bad, but not enough."
The authoritarian has made his judgement, and all must bow to his infinite wisdom.
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